CEO characteristics predict unethical earnings manipulation in manufacturing companies.
The article explores how CEO characteristics are linked to manipulating company earnings to meet targets. This can be done through real activity management, where operating decisions are changed to boost earnings. The study found that different CEO traits are associated with various forms of earnings manipulation. By understanding these connections, auditors and investors can focus their analysis on companies more likely to engage in deceptive practices. This research helps shed light on the complexities of earnings management and how CEO behavior can impact financial reporting.